About 200 floats made their way up the popular city strip, among them 250 people who were involved in the 1978 demonstration and subsequent riot.

One of them was 78er Peter De Waal who said Australia's transformation had been liberating.

More than 12,000 people took part in this year's parade, including Australian model Jesinta Franklin who was on the Rainbow Swans float, reportedly the first float entered by a professional sporting team.

More than 1000 police officers kept a close eye on revellers as part of a huge security operation that involved strategically parked vehicles, an intelligence crew, mounted police, the riot squad and sniffer dogs.

Five people were arrested during the night's festivities in two separate incidents at Pitt Street and Hyde Park, a NSW Police spokeswoman told AAP.

Three males were issued future court attendance notices for offences including resisting arrest, offensive behaviour, assaulting police and failure to comply with instructions.